Freetrade, Britain's answer to Robinhood, says its CEO is stepping down

s

LONDON — The boss of U.K. stock trading service Freetrade is stepping down and leaving the company with immediate effect, the company told CNBC exclusively Monday.

Adam Dodds, who co-founded the company with business partners Davide Fioranell and Viktor Nebehaj in 2016, will be replaced by Nebehaj, currently Freetrade's chief operating officer, as CEO, pending customary regulatory approvals.

Dodds remains the largest individual shareholder in Freetrade, owning a roughly 12% stake, according to company filings. He won't be involved in the day-to-day operations of the company from now, however a Freetrade spokesperson said he'll continue to support the company's evolution from the "outside."

"When reflecting on the journey from idea to over a million users with billions in assets, it's getting through the tough times you remember the most," Dodds said in comments shared with CNBC. "We almost died so many times it's hard to count."

"Now, after putting up our first profitable quarter and with the business on a strong sustainable footing, it's time to hang up my skates. Freetrade is default alive and ready to take on the incumbent platforms in the UK with self-sustaining growth," Dodds said.

Dodds added: "I'm very happy to say Viktor will be stepping up to take over the helm as CEO. I'll be doing everything I can to support him and the company from the board. As for me I'm looking forward to getting to know my kids better, annoying my wife on the farm, and finally getting my pilot license."

Nebehaj, Freetrade's incoming CEO, applauded Dodds' eight-year run as CEO and said that "it's natural that different stages of a company's growth require different leaders."

"With our first profitable quarter behind us, I'm excited about the size of the opportunity ahead," Nebehaj said in a statement. "Our talented and high-quality team is building the right product for our customers."

Dodds' departure follows a wild ride for the company in recent years. Dodds took Freetrade from a scrappy startup in the early days seeking to disrupt the world of wealth management, to a 500-person company with over 1.4 million users.

In 2020, Freetrade was onboarding thousands of users a day as retail trading activity boomed in the wake of the GameStop stock-trading saga, which saw a community of hardcore fans of the U.S. video game retailer drive up the price of the company's share price.

More recently, it's been forced to tighten its belt as the reality of a gloomier macroeconomic environment set in. In 2022, Freetrade announced measures to lay off 15% of its workforce as sought to push toward profitability.

The following year, Freetrade raised £2.3 million ($2.9 million) in a crowdfunding round on Crowdcube at a valuation of £225 million — a 65% discount to its earlier £650 million valuation. Freetrade at the time blamed a "different market environment" plagued by higher interest rates and inflation.

More recently, the firm has had news to cheer about. Freetrade reported its first-ever quarter of profit in the three months through March, according to unaudited financial statements shared with CNBC in April. Preliminary revenues hit £6.7 million for the quarter.

Freetrade still generated an annual loss of £8.3 million in 2023, down from the £28.8 million loss it racked up the year prior, while revenues climbed 45% to £21.6 million in the same timeframe.